Consultant referral services compared

We last left our hero pondering a question about consulting challenges. Out of the 202 of you who responded as of this writing, 50% answered "finding new business". Interestingly, only 1% responded "keeping clients long-term". Nobody commented about finding new business, though. Most of the comments complained of not being able to collect payment in a timely manner -- a topic that I'll save for a future post. Today, we'll talk about beating the bushes for business. I've already generally addressed that subject before, so today I'll drill down on one of the methods I touched on in that post: referral services. Let's examine a few.

Guru.com allows employers to post opportunities to be bid on by potential freelancers. They offer three levels of membership for independents. Their Basic membership has no up-front costs, but Guru.com gets 10% of your fee. Furthermore, you're limited to 10 bids every 30 days, you're restricted to bidding on jobs in your location as specified in your profile, and you appear in search results below higher membership classifications. If you upgrade to Guru membership, then they only take 5% of your fee, you can bid on 100 more projects per month (geez), your bidding is not limited by location, and you show up in the search results ahead of those cheapskate little Basic members. The price for Guru membership varies from $30 to $100 per quarter, depending on your area of expertise -- but you can get a 50% discount by paying annually. "Programming" and "networking" are both at the top of that price range. But wait! There's also the "Guru VENDOR" membership for about 30% more, which pops you to the very top of the search results and gives you access to even more bids (projects marked as "vendor only"). So you've got to ask yourself one question: "Do I feel lucky?" Erm, I mean, "Am I going to find enough work through this service to justify an up-front cost for better exposure against paying an extra 5% per job?" Forgetting the other benefits for a moment: if you figure on getting jobs that pay you a total of $2000 or more every quarter, then you'll be better off with Guru membership -- because the $100 quarterly fee would be offset by the extra 5% off the top. Of course, in either case you have to be able to justify the initial 5%. Guru.com has over 30,000 registered businesses, with over 600,000 active members competing for jobs - a ratio of 20:1.

Hotgigs.com offers two levels of membership for freelancers. The Basic membership is free, and they only collect a fee per job if that job is a "managed gig". The amount of that fee, as well as whether you or the client pays it, varies by gig. Basic members are limited to applying only to these managed gigs (you knew they had to make a buck somewhere), but potential hirers for other jobs can search for you and hire you at no additional fee. If you upgrade to a Premium membership for $99 a year, then you can actively apply for any job. So your break-even question is, "Does the ability to seek out more opportunities result in enough new business annually to justify a $99 finder's fee?" HotGigs has only 4,770 hiring members, with 124,006 registered consultants - a ratio of 26:1.

Contracted Work (which seems to be a freelancer's arm of Smart Hunt) provides a similar service, but has no free membership options. Their Basic membership is $15 a month (or $100 annually), which gets you a listing and allows buyers to contact you for jobs you bid on. Gold Membership ($25/mo or $160/yr) puts you above Basic members in the bid lists and search results. Gold Plus ($35/mo) adds your profile to a "front page" rotation in your category. While these membership options seem more pricey than those of the other two listed above, Contracted Work doesn't charge any fee per contract unless payment is handled through them (5% in that case) -- so the more work you can get through this service, the more it makes sense. I couldn't find any information on their site about the number of member companies or freelancers they've signed up.

Obviously, you shouldn't sign up for any of the fee-based options unless you really intend on using them. The "free" options (translate: pay later) initially cost you only the time you spend signing up and using the service. If you're short on business, you should have the time available to do that.

Personally, I've never obtained any work through any of these sites (I haven't really tried) -- so all I know about them is what I've learned online while writing this post. Do any of you have experience with these services, or any others you'd like to discuss?

About Chip Camden

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

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Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant blog, he also contributes to [Geeks Are Sexy] Technology News and his two personal blogs, Chip's Quips and Chip's Tips for Developers.

Chip, thank you for your insightful follow-up article comparing consultant referral services.
Although the ratio of jobs/consultants is a good measure of the probability that one might land a gig, it's not the only measure.
Let me explain: Consultants should also consider the wage competition and the type of gigs that these boards offer.
There a couple of huge difference, for instance, between HotGigs.com's Staffing Exchange and Guru.com. The staffing companies and hiring companies on HotGigs.com are looking for consultants to bring onto their teams for medium to long-haul projects. This means that many of the consulting gigs on HotGigs are best suited for people living in North America and near the actual job site. In fact, the vast majority of HotGigs' consultants are in North America.
The same is not true of the short-term gigs on Guru. Anyone who has bid for the little projects on Guru knows that they are primarily one-offs that pit the U.S. consultant against off-shore workers who drastically under price their services. I think of Guru's contract listings as bottom of the barrel, low-paying short-term projects.
The gigs there aren't really in the same league as the gigs on HotGigs.com.
Consultants should think through these points clearly before investing in any of these types of lead generation services.
Disclosure: I run a small PR and Marketing firm in Puerto Rico and have used both Guru and HotGigs to look for gigs and hire project workers. So I've experienced Guru.com and HotGigs.com as both a consultant and a hiring company. Additionally, I am a paid consulting working directly with HotGigs. So I've had the opportunity to analyze various consulting boards to a deeper degree than most folks.

Thanks for the info, D. And thanks for disclosing your relationship to HotGigs. Not having used either service for real work myself, I can't comment on the veracity of your observations. I'd love to hear the other side from someone at Guru, as well as some opinions from neutral parties.

The majority of the clients I find are local to my service area. I can typically pick up clients via word of mouth, personal references, and good old fashioned networking. I'm actually going to give one (or more) of these sites a try to see what they breed. I'm not really looking for too much new business as I'm staying rather busy here in Houston...
Thanks for the useful info as always!

Actually you bring up a good point there. A lot of times when I'm meeting with new or "cold" clients I really have to go over my SLA, mutual expectations, etc. With referrals and networking it's great because you have that "osmosis" effect of both marketing and your business acumen.
However, I'm still curious about the online engines. Lately I've done some testing on the local craigslist site and it's brought a couple of leads.
What keeps running through my mind is that most of the people that need help(especially urgent assistance) may or may not have Internet access and most likely aren't going to spend time looking. They expect to call someone to fix the problem immediately, then after you "earn your spurs" you typically can work an SLA with them.
Keep the good articles coming, Sterling. Between your blog and the network admin blog, I'm stuck on TR!
-James